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Has TikTok’s Robust Growth Reached a Plateau?

By Bloomberg / Oct 25, 2019 03:17 AM / Business & Tech

Photo: Bloomberg

Photo: Bloomberg

User downloads of the viral short video app TikTok run by Chinese upstart ByteDance Inc. fell in the third quarter for the first time since its inception two years ago, according to data from Sensor Tower.

The app generated 177 million first-time users across the Apple App Store and Google Play in the quarter through September. That was a 4% decline from a year earlier. It was the first time the hit app recorded a drop in quarterly new installations, the mobile data provider said. TikTok has been installed by around 564 million users so far this year and has been installed 1.45 billion times since its launch.

TikTok has evolved into a global phenomenon known for lighthearted content — including lip syncing and dancing — uploaded by teenage users from Boston to Bangalore. It’s also one of the few examples of a Chinese social media platform that has achieved global success. Beijing-based ByteDance is the world’s largest startup with a valuation of $75 billion, according to CB Insights.

ByteDance has long splashed huge buckets of money advertising TikTok on Facebook, essentially buying users away from its biggest rival. But according to Sensor Tower, TikTok dropped out of the top 10 app-install advertisers on Facebook in the second quarter after ranking at the top in the U.S. for four quarters in a row. That coincided with a sharp plunge in new user growth in the country — from the first quarter’s 182% year-on-year to just 16% in the second quarter.

A ByteDance spokeswoman said TikTok doesn’t comment on third-party data.

“With any app growth, there will come a time when it plateaus, especially since TikTok had grown so much,” said Alvin Foo, managing director of Reprise Digital, a Shanghai-based online marketing agency under the Interpublic Group of Cos Inc. “They should worry more about monetization and evolving.”

The company also faces greater scrutiny overseas, including from Facebook Chief Executive Mark Zuckerberg. He called out the Chinese app earlier this month over privacy and freedom of speech concerns.

Zuckerberg’s remarks came after TikTok drew criticism for its alleged censorship of politically sensitive content to appease Beijing such as videos of pro-democracy protests in Hong Kong. TikTok has denied those allegations. It announced last week it formed a team that includes two former U.S. lawmakers to review its content moderation policy.

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